12 Angry Men has a great exposure of one of the newest credit card scams - banks that pre-charge non-activated accounts.|
Let?s suppose that the customer, in an attack of buyer remorse, upon receiving his plastic decides that he doesn?t need another card, so he just cuts up the card. That is to say, the card is never activated.More adventures in Credit Card Companies - more adventures in finding ways to fleece the public.
20 days later he get a statement with a $29.00 or some such charge against his card. It might be for an extended warranty plan or a card protection plan, but the customer knows that he cut up and never activated the card. He disregards the statement. (Most likely he never opens it because he knows he doesn?t have that card.) After 30 days, the card gets hit with interest (e.g. 24%) plus $29 late fee. Balance is now $58.58. Second month passes ? another interest and late fee. Balance is now $88.75. Account is deliquent 60 days, letter is sent. ?Why is is this bank bothering me? ? into the garbage. Another month, another late fee. Balance now $119.53, and so forth until you get a phone call. ?I don?t owe you anything?. Suppose the card holder was sub-prime and they were given a credit line of $500. After a while, the accumulated balance exceeds the credit limit and they get both a late fee and an over-limit fee.
In the particular case I am speaking of, customers had run up balances of $1500 or more having never activated their card. Not to mention royally screwing their credit histories at the bureaus.